CareNet, Inc.

Briefing Materials for Financial Results
for the Fiscal Year Ended December 31, 2023

Katsuhiro Fujii, President

Contents

1. Our Business Model

2. Financial Results Highlights
3. Review of the Mid-term Management Plan (2021-2025)
4. New Mid-term Management Vision
5. FY2023 Financial Results and FY2024 Plans

2

Our Business Model[Contents]
1. Our Business Model
2. Financial Results Highlights

3. Review of the Mid-term Management Plan (2021-2025)
4. New Mid-term Management Vision
5. FY2023 Financial Results and FY2024 Plans

1. Our Business Model

Corporate Profile
Name

CareNet, Inc.

Address

Sumitomo Fudosan Chiyoda Fujimi Bldg., 8-19, Fujimi 1-chome Chiyoda-ku, Tokyo, Japan

Established

July 1996

Employees

345 (as of December 31, 2023)

Business
activities

Medical contents services for doctors and medical professionals,
Medical and pharmaceutical business support for pharmaceutical companies

Business Activities

Corporate Philosophy

Improvement of future medical care by
information technology and imaging

Striving to create a sustainable healthysociety in the digital age

CareNet distributes practical information that isuseful in routine clinical practice to doctors andother medical professionals via the Internet andprovides pharmaceutical companies with solutions
for the effective communication of pharmaceutical

CareNet contributes the creation of a sustainable
society that is healthy and offers comfortableworking environments for both the recipients andproviders of medical care by constantly evolving ourbusinesses through technology and enthusiasm.

information.
4

1. Our Business Model

Our Business Model■ CareNet develops a variety of businesses that utilize the “doctor platform” oriented around CareNet.com.
CareNet.com
Fee payment

Providepharmaceuticalinformation

PharmaceuticalDX businessPharmaceuticalcompanies

Supportbusiness/marketing
Support clinicaldevelopment

Fee payment

Hospitals

Doctors
Fee payment

Medicalplatform
business

Medicalprofessionals

Provide medical
education contents

Introduce doctors

Outplacement
servicecompanies

The “Pharmaceutical DX business” is engaged in the service of providing doctors with information on the proper use of therapeutic drugs under contract withpharmaceutical companies, using our doctor platforms such as “CareNet.com.” Its business model relies on obtaining service income from pharmaceuticalcompanies, and it is our main business that accounts for about 90% of the total net sales of the CareNet Group (the “Group”).
The “Medical platform business” is engaged in the service of providing fee-based medical education videos to our member doctors and medical professionals.
Since becoming the first company in Japan to provide specialized information programs for doctors, we have built an extensive track record in producing medical
education programs. The business also provides information services for supporting job changes and opening businesses through group companies, with a viewto helping our member doctors’ career advancement and work-life balance improvement.
51. Our Business Model

Pharmaceutical DX BusinessBusiness model for the Pharmaceutical DX business■ CareNet has endeavored to spread the clinical development and proper use of new medicine frompharmaceutical companies through use of the doctor platform. We have partnerships with over 70
pharmaceutical companies, growing this into the core business of the Company.
Doctor platform (CareNet.com, etc.)

Consignment
contract

Provide information
Facility DB

Doctormembers

Responses/logs

CareNet.com

Pharmaceuticalcompanies

Doctor DB

Reports on results

Main services of the Pharmaceutical DX businessIT solution for connecting doctors and pharmaceutical companies: MRPlus®
One of our core services that broadcasts video content created from the perspective that the involvement of doctors is needed to target other doctors, enabling
the analysis of doctors’ responses while creating opportunities for engagement with MRs. More than 50 pharmaceutical companies have adopted this service.
Online livestreams of seminars by Key Opinion Leaders (KOLs1) available nationwide: Online seminars
Busy doctors can watch KOL seminars without having to leave the office. Online livestreaming is a very effective way to quickly broadcast information about
new treatments nationwide. Over 500 seminars are conducted annually, and this is a core service together with MRPlus®.
Besides the above, through our group companies, CRO, SMO, and CSO, which dispatch professionals, we provide high-quality service in tandem with thedoctor platform.
1 KOL is an abbreviation for key opinion leader. KOLs refer to doctors who have wide influence in the medical industry. As part of sales promotion activities for their products, pharmaceutical companies reachout to KOLs, who are medical experts, in order to spread the latest pharmaceutical information. KOLs include doctors who are authorities in academic societies, professors at university hospitals, anddirectors of large hospitals.

61. Our Business Model

Medical Platform Business
Main service: CareNeTV
On-demand clinical videos for self-study by medical professionals

6,277

Paying members(As of December 31, 2023)

About 20 years producing medical education programs
As Japan’s first TV station specializing in content for
medical professionals (satellite broadcasting ended in
March 2011, switching to Internet distribution), CareNet hasabundant experience in producing medical education
programs, and CareNeTV delivers programs that cater tothe specific learning needs of medical professionals.

Complete lineup of programsMore than 2,000 programs are available, with approx. 10
new programs being released every month. Packed withuplifting and useful information from leading lecturers who
are active on the front lines of clinical practice! Designed
around programs for improving clinical skills in everythingfrom primary care to specialized fields, video content isavailable for a variety of genres, including preparation for
medical specialist exams, presentations, English, andstatistics.
Fee▪ Monthly/5,500 yen ▪ PPV/330 yen 7

1. Our Business Model

CareNet.com
Medical information website used by more than 450,000 medical professionals
Members

450,219

Doctors who aremembers

224,568(As of December 31, 2023)“Medical contents” for immediate use in the field
An abundant selection of content is available for immediate use inclinical settings, including videos of procedures, patient
instructions, and explanations of relevant guidelines.

International research and news on medical care
Carefully selected articles published in leading international
journals are summarized in Japanese and are made available
together with the latest medical news in Japan to facilitate quick
and easy understanding of the current state of medical care.

8Financial Results Highlights[Contents]
1. Our Business Model
2. Financial Results Highlights

3. Review of the Mid-term Management Plan (2021-2025)
4. New Mid-term Management Vision
5. FY2023 Financial Results and FY2024 Plans

2. Financial Results Highlights

The Fiscal Year Ended December 31, 2023 - Financial Results Summary■■

As the ePromotion market, which is our core business, has been sagging, we could not achieve the targets
for FY2023.
On the other hand, with the expansion of services, sales grew from the previous year in both thePharmaceutical DX business and Medical platform business.

(Million yen)
The fiscal year ended December 31, 2023
By segment
Company-wide Pharmaceutical Medical platform
DX business

Adjustment
amountProgress ratebusiness

Net sales

10,235

9,178

1,057

-

93.0%

Operating profit

2,428

3,941

264

-1,77680.9%

Ordinary profit

2,467

-

-

-

82.2%

Profit attributableto owners ofparent

1,510

-

-

-

75.5%

10

Review of the Mid-term Management
Plan (2021-2025)[Contents]
1. Our Business Model
2. Financial Results Highlights

3. Review of the Mid-term Management Plan (2021-2025)
4. New Mid-term Management Vision
5. FY2023 Financial Results and FY2024 Plans

3. Review of the Mid-term
Plan (2021-2025)

Targets Set in the Mid-term Plan

■ We aim to achieve consolidated net sales of 30.0 billion yen and consolidated operating profitof 10.0 billion yen by 2025.
⁃ We will continue to grow strongly in the expanding pharmaceutical DX market.
■ We aim to build a business model that contributes to the creation of a sustainable society.
⁃ We will build a model in which the Medical platform (MP) business and Health data science (HDS)
business are linked to the growing Pharmaceutical DX business.
MP (New)

Sales

Pharmaceutical DX
(New)

8.0
billion
yen

2020

2021

Existing businesses of Pharmaceutical DX and
Medical platform (MP)Organic growth

Existing
business

5.3
billionyen

Newbusiness

Growth through new business models
・M&A promotion
・Business alliance promotion
・Development investment promotion ・ESG/health management promotion

30.0
billion
yen
2025

CAGR
(targets)(Period of the
Mid-term Plan)

Management targets

2020 (results)

2025 (targets)

New sales

5.3 billion yen

30.0 billion yen

41%

Operating profit

1.5 billion yen

10.0 billion yen

46%

Operating profit
ratio

28%

33%

-

Listed stock market

TSE Mothers

TSE Prime-

Doctor members

180,000(~60% of doctors)

250,000(~80%)
12

“Mid-term Plan 2025” Growth Plan by Segment

3. Review of the Mid-term
Plan (2021-2025)■ Since 2021, with the Pharmaceutical DX business as the center of the growth, the Company hasplanned to achieve continuous high growth in both the existing business and new business.
Segment

New/Existing segment

FY2020(Results)

Pharmaceutical DX
business

FY2025(Plan)•Increase of doctor members (250,000 in FY2025)

ePromotion business(Existing business)

Important policy

4.8 billion yen•Development of hybrid model in collaboration withCSO

15.1 billion yen•Anticipated CAGR of 25%
CSO/CRO/SMO/data, etc.
0 yen

•Pursue growth in new business segments with
M&A as the core driver

10.9 billion yen(New business)
Segment total
Education/Human resourcesbusiness

4.8 billion yen

26.0 billion yen

0.5 billion yen•Expansion of educational contents and career
services

2.3 billion yen

0 yen•Pursue growth in new business segments with
M&A as the core driver

1.7 billion yen(Existing business)
Medical platform Management consulting/(MP) business, etc. Health data science business(New business)
Segment total

Consolidated net
sales

0.5 billion yen

4.0 billion yen

5.3 billion yen

30.0 billion yen＜Important preconditions for the plan＞◼ The growth in the existing business of Pharmaceutical DX (ePromotion) will be accelerated by COVID-19, with a continuing
CAGR of 25%.
◼ New business in both the Pharmaceutical DX business and MP business will expand with M&A as the core driver, andinvestment will continue and sales will increase.
13

Transition of Business Environment, and Issues in
the Pharmaceutical Industry that Erupted in 2023

3. Review of the Mid-term
Plan (2021-2025)■ Significant environmental changes before and after COVID-19 have influenced promotion■ Drug lag problems have worsened since 2017, resulting in stagnation in new drug development andconstituting a growth constraint
2020
Business
environment

MR

2021

MR activities halted

2022

2023

MR reduction accelerated

2025

Reclassification of COVID-19 asClass 5 infectious diseases

Depreciationof the yen

Sharp depreciationof the yen

Other factors

Cost reduction in foreign
pharmaceutical companies

Countermeasures
Development
environment

Drug loss

2024

COVID-19 chaotic period

COVID-19 review period

・Establishing details
・Promoting DX
Active outsourcing andpreparation for remote work
system・Staff and cost reduction
・ROMI evaluation of eachmarketing measure
Reexamining resources andchannels with no sales impact

Interest rates down in the US,
and up in Japan(toward appreciation of the yen)
Work-style reforms applied in hospitals(starting April 2024)
Post COVID-19 experimental period

・Promotion activities resumed
・Outcome-oriented
Challenge in increasing productivity
and attaining engagement with asmaller number of MRs

Decline of drug prices and high-cost of clinical trials → Over 60% of new drugs produced in Europe
and the US are lost

Although new medicine is the source of growth in the pharmaceutical market, Japan is the only developed
country that zero growth is forecasted by 2030 due to the drug loss issue (IQVIA）.

Countermeasures

International joint clinical trial
Abolishment of the system torequire Phase 1 trials
14

Influence of Changes in Business Environment andRevision of “Mid-term Plan 2025”
New/Existing segment

Pharmaceutical DX business
MP (*1) business, etc.
Consolidated net
sales

ePromotion business(Existing business)

CSO/CRO/SMO/data, etc.
(New business)

FY2020

FY2021

FY2022

FY2023(Results)(Results)(Results)(Results)

4.8 billion 7.4 billion 8.4 billion
yen
yen
yen

0 yen

0 yen

0.1 billion
yen

3. Review of the Mid-term
Plan (2021-2025)

Influence on business in FY2023

Revenue decreased in FY2023 due to the cost
reduction in 2022 and 2023 (influenced by
reduction of online seminars). Based on ROMI
evaluation, it is recognized that required
7.5 billion
outcomes differ from ePromotion asyenadvertisement to ePromotion for sales productivity
improvement. In order to improve sales
productivity, engagement (*2) needs to beestablished.
A model to reduce clinical trial costs needs to be
developed first. More deliberate steps will be
1.7 billion
taken in conducting M&A. It would be prematureyen
to invest in medical data as relevant regulations
remain strict.

Segment total

4.8 billion 7.4 billion 8.5 billion 9.2 billion
yen
yen
yen
yen

Education/Human
resources business(Existing business)

0.5 billion 0.6 billion 0.9 billion 1.0 billion
management consulting, etc. in response to the
yen
yen
yen
yen

Management consulting/
Health data sciencebusiness(New business)
Segment total

FY2025(Plan)

15.1 billion yen

10.9 billion yen

26.0 billion yen
Growth potential in the career business and2.3 billion yen

work-style reforms implemented from FY2024.

0 yen

0 yen

0 billion
yen

0 yen

0.5 billion 0.6 billion 0.9 billion 1.0 billion
yen
yen
yen
yen
5.3 billion 8.0 billion 9.3 billion
10.2
yen
yen
yen
billion yen

Business development for medical institutions has
stagnated during the COVID-19 period. It would
be premature to invest in medical data as relevant
regulations remain strict.

1.7 billion yen

4.0 billion yen
30.0 billion yen“Mid-term Plan 2025” needs to be revised in accordance with significant changes in the precondition for the plan,caused by the change in business environment before and after COVID-19.

*1: MR refers to “Medical Platform.”*2: Engagement refers to “establishing and maintaining trust with doctors through dialogue.”

15

New Mid-term Management Vision[Contents]
1. Our Business Model
2. Financial Results Highlights

3. Review of the Mid-term Management Plan (2021-2025)
4. New Mid-term Management Vision
5. FY2023 Financial Results and FY2024 Plans

Industry issues to be Resolved andDirection of Future Growth

4. New Mid-termManagement Vision

Significant changes in the business environment→ The pharmaceutical industry has fully entered the process reform stage in 2023

Issue 1

New drugbusiness

ROMI issues◼ Evaluation based on sales impact, regardless ofsales channels◼ Challenges in promoting engagement

Issue 2

New drugdevelopment

Issue of high-cost of clinical trials◼ Inefficient and high-cost clinical trials in Japan◼ Challenges in patient recruitment and data collection

Furthermore, as a medium to long term issue
Issue 3MarketgrowthDrug loss issues
The key is how to develop, approve, and distribute new drugs inJapan that are produced by Emerging BioPharma companies(EBP: with annual revenue of less than $500 million and R&D
spending of $200 million or less) in Europe and the US.

Issues which cannot be
resolved solely by theexisting “ePromotion”
and DX model[1]New model to utilize
ePromotion is required
for the process reform
in development andbusiness!
In addition to streamlining
clinical trials, an effective
system needs to beestablished to enableprocurement of prospective
medicine from overseas,
and more efficient sales anddistribution in Japan.
[2]New model for EBPs isrequired!
17

Summary of the New Mid-term Vision 2026(“Vision 2026”)

4. New Mid-termManagement Vision

We will continue to grow in accordance with our new direction, “Vision 2026”,
determined in accordance with changes in the business environment.
Vision 2026
1

Support for Process Reform in Clinical Trials
and Drug Sales

Advancement of the Pharmaceutical DX businessAlthough existing ePromotion services (IT services that send information to doctors via the internet: MRPlus, etc.) help
to provide a sound foundation for revenue, we need to mobilize our capabilities, cultivated over years, to accelerate
future growth and develop a new service model to attain engagement (relationship management through dialogue) with
KOLs and medical specialists, which will be applied in clinical trials and drug sales of pharmaceutical companies.

2

Market Creation and Resolution of Social Issues

Entering the Seed Incubation business

Declining drug prices and the high-cost of clinical trials are causing a drug loss issue in that new medicines available inEurope and the US are not being developed in Japan, resulting in the stagnation of the Japanese pharmaceuticalmarket. In response to this issue, we will contribute to promoting the introduction of new medicine by applying theabove-mentioned service to support clinical trials and drug sales.

3

Portfolio Expansion
In addition to the priority development business described above, we will further expand our business portfolio bystabilizing the existing business of the Pharmaceutical DX business and developing new services in the Medical
platform business, etc., which will add multiple layers to support our growth.

4

New Leadership and Governance
The Company’s system will be partially changed and reinforced to fully promote Vision 2026 and accelerate growth from2027 and beyond.
181) Support for Process Reform in Clinical Trials
and Drug Sales

4. New Mid-termManagement Vision

By mobilizing our capabilities, cultivated over years, and developing and providing intermediary/agent services for pharmaceuticalcompanies to support engagement (relationship management through dialogue) with doctors, the “Pharmaceutical DX business” willcontinue to be the key driver of our growth.

Doctor members & DB
・Theme/preference
・Specialty
・Number of patients・History of meetings with theCompany

Contents

Access・Cooperation and appearance inour programs・Monitoring・Research and interviews
・Contribution and proposal, etc.

・Clinical media
・CSO professionals
・Remote・DX technologies, etc.

Attaining engagement with KOLs and medical specialists(Establishing a system to enable contact with doctors upon request of the Company)

Support for clinical trials◼
◼

Provide cost-competitive CRO/SMO services by implementing
efficient processes for patient recruitment and data collection
Promote service development by strengthening collaboration
with our group companies (CRACE Co., Ltd (CSO) and YMG
SUPPORT CO., LTD(SMO))

Support for drug sales◼
◼

Contribute to the enhancement of business productivity of MRs,
who are allocated for new drug business, by providing
engagement
Strengthen collaboration with CareNet Partners, Inc. (CSO),
and establish an engagement-focused joint venture, Crux, Inc.

Estimate of CRO/SMO market: 350 billion yen (in 2030)

Estimate of outsourcing market business: 200 billion yen (in 2030)

Increase of our market share

CSO market, currently worth 70 billion yen, will be driven by the Company(The Company’s estimate is based on data from Japan CRO Association
and Japan Association of Site Management Organizations)(The theoretical value of outsourceable market size is calculated on theassumption that the number of MRs in Japan is 30,000)

192) Market Creation and Resolution of Social Issues

4. New Mid-termManagement Vision

As a medium to long term target, we aim to develop a business model that contributes to countermeasures for drug loss.
Annual average growth rate of the ethical drug market
2017‐2021(Results)

2022‐2026(Forecast)

U.S.

+4.9%

+2.5-5.5%

5 European countries(DE, FR, IT, NL and GB)

+4.8%

+3-6%

China

+6.1%

+2.5-5.5%

Japan

-0.5%

-2-1%

Prepared by the Company based on IQVIA INSTITUTE, Global Use of Medicines 2022 OUTLOOK 2026,
and 2023 OUTLOOK TO 2027

Negative growth of the Japanese
ethical drug market is caused by the
decline of drug prices and high-cost ofclinical trials. This creates barriers tomarket entry for EBPs, which currently
cover about 70% of new drugs
developed in the world.

Through the Company’s group alliance, a new drug manufacturing business model (seed incubation model) will be
developed to provide a seamless process from procurement of EBP-originated drugs to efficient clinical trials and drug sales.

New drug procurement(MIJ）

Seed incubator(LinDo)Agent services of clinical trials
and drug sales (the Company)

Medical Incubator Japan K.K. (MIJ),
with experience of investment inprominent bio-venture companies in
Europe and the US, will procurepromising seeds from abroad.

LinDo, a pharmaceutical company
focused on intractable diseases and rarediseases, will be newly established tofacilitate the introduction of new drugs
developed in Europe and the US to theJapanese market.

Through the CareNet Group (theCompany, CRO, SMO, and CSO),
efficient and low-cost agent services
will be available for clinical trials anddrug sales.

Capitalsubscription

Capitalsubscription

If the Japanese ethical drug market grows by 1.0%, it will generate a huge market equivalent to 100 billion yen. By
introducing new medicines for intractable diseases and rare diseases, we will contribute to both industry growth
and the resolution of social issues.
203) Portfolio Expansion

4. New Mid-termManagement Vision

Pharmaceutical DX Business1■ Ensuring the stable profit of existing business (ePromotion services such as MRPlus, etc.)
ePromotion services as medical advertising will remain a primary tool for the pharmaceutical marketing of mainly existing medicines.
The budget for pharmaceutical marketing in the whole industry will reach 200 billion to 250 billion yen in 2030 (estimated by theCompany based on annual securities reports of public companies). The Company will continue to expand its market share whileaiming at the acquisition of doctor members and improvement of viewership.

■ Starting to enter the Asian market
By sharing our know-how, we will make preparations for establishing hubs in China and Southeast Asia, where thepharmaceutical market has been rapidly growing. In this regard, the network of KOLs, which plays a significant rolein conducting clinical trials and promoting new medicines, will be further expanded outside of Japan.

2

Medical Platform Business■ Ensuring the stable growth of existing business (Education/Human resources business)
For educational contents, in addition to reinforcing our brand through diversifying existing contents in CareNeTV(introduction of schooling models, etc.), we will also deliver new contents for nurses. The career business is steadily
improving and will continue to grow with the enhancement of the organization.

■ Starting to enter the management support business for medical institutions
In November 2023, we acquired Medical Create Co., Ltd and DALI-inc, which had operated
management consulting business for hospitals. As we have entered the management
support business for medical institutions, growth synergies will be generated throughcollaboration with the Group.

By stabilizing the existing business of Pharmaceutical DX business and developing newservices in Medical platform business, our business portfolio will be further expanded toprovide multi-layered support for our growth.
21

New Leadership and Governance to Promote “Vision 2026”

4. New Mid-termManagement Vision

The Company’s leadership and governance system will be partially changed to clarify the accountability to revise
the “Mid-term Plan 2025” during the period, and to reinforce the execution towards the new direction, “Vision 2026.”

1

Change of CEO
Motoyasu Ono, the current CEO, will step down and be replaced by Katsuhiro Fujii, the current COO,
at the General Meeting of Shareholders in March 2024. Mr. Ono will also return his representative
rights, thus there will be only one representative of the Company, Katsuhiro Fujii (President and CEO).

2

Clarification of roles in the field of priority development
Motoyasu Ono will remain as Director of the Company and assume the position of Outside Director of
LinDo, a newly established Seed Incubator. He will strongly promote the capital and business alliancewith LinDo and contribute to a medium- to long-term growth of the Company.
Jun Katsura, the current Outside Director, will resign as Outside Director of the Company uponannouncement of financial results in February 2023. Mr. Katsura will assume the position of Presidentof LinDo and promote the collaborative business with the Company.

3

Appointment of outside independent director
As a successor of Jun Katsura, the Company plans to appoint personnel with management
experience at a global pharmaceutical company as the Company’s Outside Director (Independent
Director). The Company will also appoint external personnel as CXO of the Company, thus
strengthening the management structure to achieve “Vision 2026”.
22

Overview of the New Mid-term Management Vision“Vision 2026”
1

4. New Mid-termManagement Vision“Vision 2026” as a development and demonstration period
In 2022 and 2023, the pharmaceutical industry entered the process reform stage in clinical trials and drug
sales. In accordance with this environmental change, the Group will proceed with business development
and position the three years from 2024 to 2026 as a “development and demonstration period.”2

Priority policy for development◼ An “engagement service” will be established during the period, which will contribute to sales
productivity improvement with a smaller number of MRs, and also create a model to enable efficient
clinical trials and cost reduction. By mobilizing our capabilities, the Pharmaceutical DX business willcontinue to grow in the future.
◼ We will enter the Seed Incubation business focused on intractable diseases and rare diseases.
◼ Our business portfolio will continue to be expanded.

3

Target of growth
While development is prioritized during the period, we will aim to achieve sales growth, with CAGR of 10%
to 20%, through boosting group sales, improving service in the short term, and M&A, etc. Operating profit
ratio is projected to decrease to around 20% due to increased expenses resulting from investment indevelopment and goodwill associated with M&A.

4

New leadership and governanceOur management system will be partially changed to achieve “Vision 2026” and accelerate growth in 2027
and beyond.

During the period from 2027, which will be positioned as a “growth period,” we will aim to achievesales growth with CAGR of above 20% and achieve recovery in the operating profit ratio.
23

4. New Mid-termManagement Vision

Shareholder Return■ The Company has a basic policy that prioritizing investment in growth and thereby leading to theenhancement of corporate value (stock price) is the best return policy.
Fiscal year ended Fiscal year ended Fiscal year ended Fiscal year ended
December 31, 2020 December 31, 2021 December 31, 2022 December 31, 2023
Dividends paid (yen)

8

6

6

12

Dividend payout ratio (%)

10.2

15.7

14.4

35.4

Dividend yield (%)

0.17

0.56

0.54

1.09

Total return ratio (%)

10.2

15.7

14.4

35.4

Total shareholder return (%)

588

540.3

560.8

562.3

The Company will propose the dividend taking a dividend yield into consideration.

24

FY2023 Financial Results and
FY2024 Plans[Contents]
1. Our Business Model
2. Financial Results Highlights

3. Review of the Mid-term Management Plan (2021-2025)
4. New Mid-term Management Vision
5. FY2023 Financial Results and FY2024 Plans

5. FY2023 Financial Results and FY2024 Plans

Financial Year 2024 Plans■

Since forecasting results is difficult due to the significant reduction in the number of MRs at
pharmaceutical companies, our major customers, and the impact of the recent depreciation of
the yen, the forecasts disclosed are only figures that can be determined with a high degree of
accuracy as of the end of FY2023.
■ In addition, regarding the forecast for the first half, we are postponing disclosure for FY2024
due to the reasons above.

(Million yen)
Fiscal year ended
December 31, 2023
Results

Fiscal year ending
December 31, 2024
Forecast

Net sales

10,235

11,60013.3%

Operating profit

2,428

2,200

-9.4%

Ordinary profit

2,467

2,200

-10.8%

Profit attributable toowners of parent

1,510

1,500

-0.7%

Growth rate26

5. FY2023 Financial Results and FY2024 Plans

Fiscal Year Ended December 31, 2023 - Financial Results Summary■

As the ePromotion market, our core business, has been sagging, we could not achieve thetargets for FY2023.
■ On the other hand, as the service area expanded, sales increased compared to the previous
year in both the Pharmaceutical DX business and Medical platform business.
(Million yen)
The fiscal year ended December 31, 2023
By segment
Company-wide Pharmaceutical Medical platform
DX business

Adjustment
amountProgress ratebusiness

Net sales

10,235

9,178

1,057

-

93.0%

Operating profit

2,428

3,941

264

-1,77680.9%

Ordinary profit

2,467

-

-

-

82.2%

Profit attributableto owners ofparent

1,510

-

-

-

75.5%

27

5. FY2023 Financial Results and FY2024 Plans

Fiscal Year Ended December 31, 2023 – Plan and Progress■

As of December 31, 2023, both net sales and operating profit have underperformed the full-year
plan.
(Million yen)

Net sales

Operating profit
Year-over-year
progress rate

14,00012,000
10,235Year-over-year
progress rate

4,000

Full-yearplan
11,00093.0%

10,000Full-year
plan
3,000

3,000
2,428

2,964

8,000

80.9%

7,271

6,000

5,014

4,000
2,526

2,487

66.1%

2,257

11,000

2,000
1,318

45.6%

2,487

1,000
23.0%

2,000

1,736

715

692

57.9%

417

3,000

44.0%

603

23.8%

2,526

715

0

0
1Q
第

１
四
半
期

2Q
第

２
四
半
期

3Q
第

３
四
半
期

4Q
第

４
四
半
期

Plan
計

画

1Q
第
１
四
半
期

2Q
第

２
四
半
期

3Q
第
３
四
半
期

4Q
第

４
四
半
期

Plan
計

画

28

5. FY2023 Financial Results and FY2024 Plans

Fiscal Year Ended December 31, 2023 – Year-over-year Results■

We achieved further growth in net sales from the previous fiscal year.
■ Continuing from the first quarter period, operating profit decreased year over year due to an increase
in selling, general and administrative expenses resulting from investment in new businessdevelopment and enhancement of personnel towards medium- to long-term growth. (Million yen)

Operating profit

Net sales
2022年12月期
FY2022

2022年12月期
FY2022

2023年12月期
FY2023+ 9.7 %

12,000

10,235
10,000

9,327

2,428

2,500

- 12.1 %+ 17.3 %
1,500

6,000

+ 13.7 %5,014+ 21.2 %
4,274

4,000

2,526
2,222
2,051 2,487- 14.7 %- 8.8 %

1,500
1,318

- 47.0%+ 2.8 %
+ 4.0 %

1,000

2,882 2,964
2,171 2,257

2,000

500

- 14.8%
2,851

3,000

2,000

8,000

2023年12月期
FY2023838
715

662 603788
417+ 22.9%
692
563

0

0
第1四半期
第2四半期
上期
第4四半期
1Q
2Q First
half 第3四半期
3Q
4Q
Full通期
year

第1四半期
第2四半期
上期half 第3四半期
第4四半期
1Q
2Q First
3Q
4Q
Full通期year

29

5. FY2023 Financial Results and FY2024 Plans

Trends in Company-wide Performance (1)Net sales(Million yen)
第1四半期
1Q

第2四半期
2Q

第3四半期
3Q

第4四半期
4Q

12,00010,000

Full year
8,004

8,000
Full year
5,304 YoY

6,000
4,000
2,000
0

Full year
3,268 YoY

1,121
783
678
683

change+88.9%

2,118

2,368

change+11.8%

1,340
1,023
821

Full year
10,235Full year
9,327

YoY
change+21.7%

2,882

YoY
change
+2.8%

1,759

2,051

2,058

2,222

2,964

2,257

2,171

1,817

Net sales for the fourth quarter
period was 2,964 million yen, up
2.8% from the same
period of the previous fiscal year,
supported by growth of theMedical platform business.

2,487
2,526

FY2019FY2020
FY2021
FY2022 2023年12月期
FY20232019年12月期
2020年12月期
2021年12月期
2022年12月期
1Q

2Q

3Q

4Q

Full year

Fiscal year ended
December 31, 2019

683

678

783

1,121

3,268

Fiscal year ended
December 31, 2020

821

1,023

1,340

2,118

5,304

Fiscal year ended
December 31, 2021

2,058

1,759

1,817

2,368

8,004

Fiscal year ended
December 31, 2022

2,222

2,051

2,171

2,882

9,327

Fiscal year ended
December 31, 2023

2,526

2,487

2,257

2,964

10,235For the past five years, except the
fiscal year ended December 31,
2020, we have seen a seasonal
factor in which sales growthchanges during the third andfourth quarters. While repeating
thisseasonality,
wehavecontinued to increase full-yearsales.

30

5. FY2023 Financial Results and FY2024 Plans

Trends in Company-wide Performance (2)Operating profit(Million yen)
1Q
第1四半期

第2四半期
2Q

3,000
2,500

518
Full year YoY
1,510 change
+9.5%

1,500
1,000
500
0

Full year
2,851

Full year
2,532

2,000

YoY
Full year change+229.6%
605

206
161
113
124

473

4Q
第4四半期

第3四半期
3Q

YoY
change+8.7%

563

Full year
2,428

YoY
change+22.9%

788

626

692
417

537

662

849

838

603

574
271
189

715

FY2019FY2020
FY2021
FY2022
FY20232019年12月期
2020年12月期
2021年12月期
2022年12月期
2023年12月期
1Q

2Q

3Q

4Q

Operating profit for the fourth quarter
period was 692 million yen, up
22.9% year over year from theprevious fiscal year, supported bystrong performance in the careerbusiness.
On the other hand, operating profit
for the full year underperformed theprevious year due to an increase in
selling, general and administrative
expenses resulting from new
businessdevelopmentandinvestment in human resources.

Full year

Fiscal year ended
December 31, 2019

124

113

161

206

605

Fiscal year ended
December 31, 2020

189

271

574

473

1,510

Fiscal year ended
December 31, 2021

849

537

626

518

2,532

Fiscal year ended
December 31, 2022

838

662

788

563

2,851

Fiscal year ended
December 31, 2023

715

603

417

692

2,428

Operating profit growth could alsochange during the third and fourth
quarters due to the impact of theseasonality of sales. While repeating
this seasonality, we have continued
to increase full-year profits.
31

Progress by Segment

5. FY2023 Financial Results and FY2024 Plans

Segment Performance – Pharmaceutical DX Business (1)Net sales(Million yen)
第1四半期
1Q

2Q
第2四半期

第3四半期
3Q

4Q
第4四半期

12,00010,000

Full year
7,425

8,000
6,000

Full year
2,222
YoY
4,816 change

4,000+11.3%
Full year
1,671
YoY
1,996
2,870 change

1,011
677
589
591

2,000

0

+97.4%

1,218
879
722

Full year
8,473

YoY
change+21.4%

2,698

Full year
9,178

YoY
change
-0.0%

1,600

1,813

1,932

2,016

2,688
2,064

1,945

2,125
2,299

FY2019FY2020
FY2021
FY2022
FY20232019年12月期
2020年12月期
2021年12月期
2022年12月期
2023年12月期

1Q

2Q

3Q

4Q

Net sales in the fourth quarter period
slightly decreased year over year to 2,688
million yen, with the slowdown in growth of
online seminars despite strong orders for
MRPlus, amid the sagging ePromotion
market, which is our core business.

Full year

Fiscal year ended
December 31, 2019

591

589

677

1,011

2,870

Fiscal year ended
December 31, 2020

722

879

1,218

1,996

4,816

Fiscal year ended
December 31, 2021

1,932

1,600

1,671

2,222

7,425

Fiscal year ended
December 31, 2022

2,016

1,813

1,945

2,698

8,473

Fiscal year ended
December 31, 2023

2,299

2,125

2,064

2,688

9,178

For the past five years, except the fiscal
year ended December 31, 2020, we haveseen a seasonal factor during the secondand fourth quarters in which sales growthchanges depending on pharmaceuticalcompanies’ decisions to exhaust budgets.
While repeating this seasonality, we havecontinued to increase sales.
From the beginning of the fiscal year
ended December 31, 2023, CoreHuman,
Inc. and CRACE Co., Ltd., which became
our subsidiaries last year, have been
incorporated into the Pharmaceutical DX
business. Furthermore, on June 1, 2023,
AD Medica Inc. has changed from a
consolidated subsidiary to an equity
method affiliate.
33

5. FY2023 Financial Results and FY2024 Plans

Segment Performance – Pharmaceutical DX Business (2)Segment profit(Million yen)
第1四半期
1Q

2Q
第2四半期

5,000

Full year
2,669

3,000
2,000

Full year
1,117
1,500 YoY

1,000

557 +100.5% 738

1,121

YoY
change+0.0%change0

Full year
4,207

Full year
3,837

4,000

347
289
305

441
371

4Q
第4四半期

3Q
第3四半期

YoY
change+9.7%

Full year
3,941

YoY
1,230 change
+0.0%

1,234

1,039

863

858

789

879

863

1,064

1,058

985

FY2019FY2020
FY2021
FY2022
FY20232019年12月期
2020年12月期
2021年12月期
2022年12月期
2023年12月期

1Q

2Q

3Q

4Q

Segment profit for the fourth
quarter period only increasedslightly year over year to 1,234
million yen. The segment profit
ratio was 45.9%, roughly thesame level as the previous year,
as,despitetheincreased
expensesresultingfrominvestment in new businessdevelopment, measures to reduce
cost of sales have contributed toour profits.

Full year

Fiscal year ended
December 31, 2019

305

289

347

557

1,500

Fiscal year ended
December 31, 2020

371

441

738

1,117

2,669

Fiscal year ended
December 31, 2021

1,064

789

863

1,121

3,837

Fiscal year ended
December 31, 2022

1,058

879

1,039

1,230

4,207

Fiscal year ended
December 31, 2023

985

863

858

1,234

3,941

Segment profit growth could alsochange during the third and fourth
quarters due to the impact fromthe seasonality of sales.

345. FY2023 Financial Results and FY2024 Plans

Doctors who are Members■

Continuing from the previous fiscal year, the number of doctors who are members
has been steadily increasing, reaching 220,000 as of December 31, 2023.
Number of doctor members
260,000

250,000

240,000

224,568
220,000

209,413
193,946

200,000

181,352
180,000

153,705

160,000

140,000

138,895

144,457

132,730

120,000

2016年
2016

2017年
2017

2018年
2018

2019年
2019

2020年
2020

2021年
2021

2022年
2022

2023年末
2023

～
～

0

2025
2025年(計画)(Plan)

35

5. FY2023 Financial Results and FY2024 Plans

Segment Performance – Medical Platform Business (1)Net sales(Million yen)
第1四半期
1Q

第2四半期
2Q

3Q
第3四半期

第4四半期
4Q

Full year
1,057

1,200

Full year
854 YoY

1,000

change

800
600

400
200
0

Full year
487 YoY

Full year
398
YoY

110 change
106
89
92

+10.0%

121

Full year
183 +50.8%
YoY
192
578 changechange+20.6%

122276

146 +25.3%

225

146

238

361

159

144
98

227

206

125

FY2019FY2020
FY2021
FY2022
FY20232019年12月期
2020年12月期
2021年12月期
2022年12月期
2023年12月期

1Q

2Q

3Q

4Q

Full year

Fiscal year ended
December 31, 2019

92

89

106

110

398

Fiscal year ended
December 31, 2020

98

144

122

121

487

Fiscal year ended
December 31, 2021

125

159

146

146

578

Fiscal year ended
December 31, 2022

206

238

225

183

854

Fiscal year ended
December 31, 2023

227

361

192

276

1,057

Net sales in this segment for the
fourth quarter period increased by
50.8% year over year to 854 million
yen,supportedbystrongperformance in the doctor careerbusiness.
During the full year ended
December 31, 2023, net sales grew
19.2% year over year to 1,057
million yen, supported by strong
performance in the career business.

36

5. FY2023 Financial Results and FY2024 Plans

Segment Performance – Medical Platform Business (2)Segment profit(Million yen)
第1四半期
1Q

3Q
第3四半期

第2四半期
2Q

300

4Q
第4四半期

Full year
228

Full year
264

200

83

12

150

100

Full year
53

50

Full year
29

-6

-50

168

88

16
42
26
26

38
28
17

24
12
22

0

Full year
111

Segment profit of the Medical platformbusiness for the fourth quarter period
increased, supported by strong
performance in the career business.
During the full year ended December
31, 2023, segment profit grew 13.6%
year over year to 264 million yen.

17

250

87

65

-30

-55

-100
2019年12月期
2020年12月期
2021年12月期
2022年12月期
FY2019FY2020
FY2021
FY2022 2023年12月期
FY2023
1Q

2Q

3Q

4Q

Full year

Fiscal year ended
December 31, 2019

22

12

24

-6

53

Fiscal year ended
December 31, 2020

17

28

38

-55

29

Fiscal year ended
December 31, 2021

26

26

42

16

111

Fiscal year ended
December 31, 2022

87

88

83

-30

228

Fiscal year ended
December 31, 2023

65

168

12

17

264
37

This material contains projections, plans, management targets, and other forward-

looking statements, etc., relating to CareNet, Inc. (the “Company”).
These statements are drawn from assumptions (information and forecasts currently
available to the Company), and it is possible that such assumptions are inaccurate
and that actual results produced may differ from those mentioned in said
statements.
Furthermore, information and data other than that concerning the Company has
been quoted from public sources, and the Company offers no guarantee regarding

the accuracy of such information.

CareNet, Inc.
Inquiries regarding IR: ir@carenet.co.jp

38